Markets have grown increasingly fearful over the past few months that Italy will find it difficult to pay off its massive debts, which stand at around $2.5 trillion. BY PALLAVI GOGOI | THE ASSOCIATED PRESS ADVERTISING NEW YORK — Mixed
BY PALLAVI GOGOI | THE ASSOCIATED PRESS
NEW YORK — Mixed economic news and light trading led stocks to close barely changed Tuesday. Consumer confidence surged to an eight-month high, but home prices dropped in major cities. Sears plummeted after reporting it would close more than 100 stores around the country.
In the latest sign of a bumpy recovery in the housing market, home prices fell in 19 of the 20 cities tracked by the Standard & Poor’s/Case-Shiller index. Atlanta, Detroit and Minneapolis posted the biggest declines. Prices in Atlanta and Las Vegas fell to their lowest points since the housing crisis began.
That report dampened investors’ enthusiasm about a jump in consumer confidence to the highest level since April. The New York-based Conference Board reported its Consumer Confidence Index rose almost 10 points to 64.5 in December. Economists watch the numbers closely because consumer spending accounts for about 70 percent of U.S. economic activity.
Henry Herrmann, chief executive officer at the investment management firm Waddell & Reed, said the increase reflected the fact that more jobs have been created in recent weeks, which will likely lead to “a more sustained” economic recovery.
“If job creation will come with wage improvement in the coming weeks, it will boost confidence further,” Herrmann said.
The Dow Jones industrial average closed down 2.65 points, or 0.02 percent, at 12,291.35. The S&P 500 was up 0.10 points, or 0.01 percent, to 1,265.43. The Nasdaq composite rose 6.56, or 0.3 percent, to 2,625.20.
The most the Dow rose during the day was 34 points, and the most it fell was 24. It was the narrowest trading range in five months. Stocks are expected to trade within a narrow range all this week as trading remains light between the Christmas holiday and New Year’s. The volume of shares traded on the New York Stock Exchange Tuesday was 2 billion, less than half the average daily volume this month.
Sears Holding Corp. plunged 27 percent to $33.38, the most in the S&P 500. The retailer warned it would close between 100 and 120 Sears and Kmart stores following poor sales during the holidays, the most crucial time of year for retailers.
The Sears news also dragged Whirlpool Corp. down 9 percent to $46.62. Investors worried the store closings would hurt sales of Whirlpool and Maytag washers and dryers the company makes.
A run of strong economic data in the U.S. has boosted the stock market in recent days. However analysts expect any gains to be tempered by worries over the European debt crisis.
Italy’s borrowing costs rose Tuesday, reflecting a continued high level of investor anxiety. The yield on the country’s 10-year bonds hit 7 percent again, which is considered unsustainable in the long run. Greece, Ireland and Portugal had to seek relief from their lenders after their own borrowing costs rose that high.
Italy is the euro zone’s third-largest economy and is considered too big to get bailed out by its neighbors. Mario Monti, the country’s new premier, got parliamentary approval last week for a big austerity package that is intended to save the country from financial disaster.
Markets have grown increasingly fearful over the past few months that Italy will find it difficult to pay off its massive debts, which stand at around $2.5 trillion.
